Key investment events: The company released the 2019 performance announcement. In 2019, the company achieved operating income of 5.369 billion yuan, a year-on-year decrease of 4.19%, and net profit of 1,227 billion yuan, +11.52% over the same period last year. The company achieved operating income of 1,306 billion yuan in Q4, down 7.63% year on year, down 1.04% month on month; Q4 achieved net profit of 285 million yuan, up 16.20% year on year and 2.25% month on month. In addition, the company announced the 2019 profit distribution plan to distribute a cash dividend of 1.65 yuan for every 10 shares. No bonus shares will be sent, and no increase will be transferred. The performance was in line with expectations. In 2019, the company maintained steady growth based on the park's relatively complete industrial chain and circular economy system. With the launch of new sulfonated pharmaceutical BA products and the commissioning of TA devices, the sulfonated pharmaceutical business chain was further extended, and the added value of the product was greatly increased. In 2019, sales revenue of 823 million yuan was achieved, an increase of 56.98% over the previous year. Fatty alcohol achieved sales volume of 273,800 tons, +6.19% over the same period last year, further increasing sales volume. The company's steam sales volume was 7.5918 million tons, +1.95% year-on-year, achieving steady growth. Sulfonated pharmaceuticals continue to be released, and ethylene-based PVC opens up room for growth. The company plans to invest in the construction of a 4,000 tons/year BA project and support the construction of a continuous sulfur trioxide sulfonation technology reform project. While increasing the scale of the sulfonation industry and the production capacity of downstream high-value-added products, the project will launch environmentally friendly supporting devices such as waste acid cracking to solve the bottlenecks in the development of sulfonated pharmaceuticals while enhancing the security capacity of electronic-grade sulfuric acid raw materials. The company has planned 300,000 tons of VCM and 300,000 tons of PVC projects, which were included in the “2020 Zhejiang Key Construction Projects”, and the project has entered the on-site construction stage. In 2018-2022, global ethylene production capacity was greatly expanded, compounded by a decline in crude oil prices on the cost side. Ethylene prices are expected to continue to decline and remain low. Ethylene PVC has obvious cost advantages and strong profitability. After the completion of the 300,000 tons/year PVC project, the company's performance will be greatly enhanced. Continue to develop hydrogen energy and benefit from the great development of hydrogen energy. The company continues to strengthen the hydrogen energy industry, using byproduct hydrogen for purification, and signed a tripartite cooperation agreement with American Air Products and Sanjiang Chemical to introduce advanced liquid hydrogen production technology to achieve low-cost large-scale hydrogen production and transportation. The company UN Hydrogen Rich Energy and Shanghai Remodeled and established Jiangsu Jiahua Hydrogen Energy Technology Co., Ltd. and is committed to the investment, construction and operation of hydrogen refueling stations in the Yangtze River Delta region. On July 8, 2019, Jiahua Energy and Zhejiang Energy Group signed the “Strategic Cooperation Framework” and the “Hydrogen Liquefaction Plant Cooperation Framework Agreement”. On September 19, 2019, the commencement ceremony of the Jiahua Hydrogen Energy Port City Hydrogenation Station project was successfully held at the Zhangjiagang project site in Jiangsu; by the end of December 2019, all preliminary approval procedures such as filing, design drawing review, and project planning permission for the two hydrogenation stations in Zhangjiagang and Changshu had been obtained, and civil engineering, equipment and installation engineering suppliers completed the tenders. The company has achieved the layout of the entire industry chain for hydrogen production, liquid hydrogen, and hydrogen refueling stations, and will fully benefit from the development of the hydrogen energy industry. Investment suggestions: The company's net profit from 2020 to 2022 is estimated to be 1,253/17.24/1,943 billion yuan, corresponding to EPS of 0.87/1.20/1.36 yuan, and PE 10/8/7 times respectively. It is optimistic that the company will benefit from category expansion and rapid growth in production capacity investment performance, and maintain a “buy” rating. Risk warning: The risk of downstream markets falling short of expectations, market development falling short of expectations, and price fluctuations of major products.